Question

The charter of Vista West Corporation specifies that it is authorized to issue 300,000 shares of common stock. Since the company was incorporated, it has sold a total of 160,000 shares (at $16 per share) to the public. It has bought back a total of 25,000. The par value of the stock is $3. When the stock was bought back from the public, the market price was $40. Required: 1. Determine the authorized shares. 2. Determine the issued shares. 3. Determine the outstanding shares.

Answer 1

Answer:

1. Authorized shares = 300,000 shares

2. Issued shares = 160,000 shares

3. Outstanding shares

= Issued shares- Shares repurchased

= 160,000 - 25,000

= 135,000 shares

Explanation:

Authorized shares are shares that a firm is allowed by law to issue to the            public.

Issued shares are shares that a company offers to the public for subscription.

Outstanding shares are shares remaining after the share repurchase.

Answer 2

The authorized shares is 300,000 shares, the Issued shares is 160,000 shares and the outstanding shares is 135,000 shares.

The Authorized shares refers to shares that a firm is allowed by law to issue to the willing public.

• The Authorized shares = 300,000 shares

The Issued shares refers to the shares that the company offers to the public for subscription.

• The Issued shares = 160,000 shares

The outstanding shares refers to the remaining shares after the share repurchase.

Outstanding shares = Issued shares - Shares repurchased

Outstanding shares = 160,000 shares - 25,000 shares

Outstanding shares = 135,000 shares

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